Hi everyone. I wanted to know from those of you who have bought REO’s what is the lowest you have offer based off of their list price?
example. REO property listed @ 134k needs 25-30k in rehab comps of 170k if you were going to flip.
trwilliams
Offered $35K on a half completed house that was listed for $139,900.
Raj
Hey Raj,
Offered $35K on a half completed house that was listed for $139,900.
Well did you get it?
John
Bought a duplex for $11,000 that was listed at $49,900 (ARV $81,000), but it took 6 months.
Mike
Still working on it, John. The question was “what was the lowest offer,” not what did you get it for. Just thought I’d put that out.
Really this is another one of those, “I really don’t understand the process” questions.
It doesn’t matter what the property (any property, doesn’t have to be a REO) is listed at. What matters is what YOU can sell it for after buying. That is the number that you should be concerned about and what you should be basing your offer upon.
Point in case, in two properties this year alone, I’ve offered $5K MORE than they were asking, simply because it was such a good price. In one of those, my offer was accepted over another by just $200 bucks. So if you’d stuck to some principle of “only of 80% of ASKING price,” you wouldn’t have had a shot at that property, even though I bought it at 50% of FMV.
Raj
Hi Raj,
I understood the question, I was just curious and wondering if you got it at such a low price. I get excited when I see that people get homes WAY under ARV. ;D
Thanks,
John
Oh I knew you did, John. Just wanted to be clear to everybody reading.
What we’re working on with my deal is to convince the bank to finance the construction that needs to be finished on this property.
The $35K offer was a cash, fully as is, no commitment from the bank for anything offer. Along with it was was a $100K offer, with $50K financed up front and $50K line of credit available for repair costs.
I believe that the bank will entertain one of the two offers, because they foreclosed on a $25K loan (of course, they’ve also held the property for over 6 months and the end of year is coming, too).
Raj
and the end of year is coming, too
Does this make a difference??
Lenders have to make end-of-year reports, often to shareholders. They like to have as many REOs off the books as possible…
Keith
in the end, you need to know what the property is REALLY worth or could be worth with X dollars put into rehab.
These days there seems to be smokin’ goin on in REO depts. as they try to ask near full market prices in hopes of finding sucker. This will change as the market continues to get softer.